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Boston Area Hospitality Market Report for Q4 2020





Despite the impact of the delta variant, Boston hotels have been steadily improving since the summer. The return of special events including the Boston Marathon and the Head of the Charles Regatta, not to mention playoff games for the Red Sox, gave Boston its best month of performance since before the pandemic. Through November, occupancy was 57.1%, exceeding average occupancy for the U.S., which was 57.6%. Thanks also to these events, ADR increased 12% month over month to$164, the highest it's been since October 2019. RevPAR is forecast to increase approximately 50% over 2020, but returning to pre-pandemic levels of RevPAR is not forecast until 2024 and 2025 and is highly dependent on the full return of groups, business travelers, and international tourists.

Boston continues to have a robust pipeline of hotels under construction and in final planning. There are 11 hotels (1,500 rooms) under construction, though none are projected to open during the remainder of 2021. The 1,054-room Omni Seaport, which opened in September, represents an increase to downtown supply of 4.5%. Nine hotels have opened already in 2021, including the 146-room Hampton Inn in Watertown, the 156-room dual-branded Fairfield Inn/Towne Place Suites in Medford, and the 286-room Newbury Hotel. Formerly the Taj Boston, and a Ritz-Carlton before Taj, the Newbury hotel had been closed since November 2019 and underwent an extensive renovation. It will continue to be positioned in the Luxury segment. Weekend rates quoted for this fall are over $800.

Asset sales slowed in 3Q21 after a brisker pace earlier in the year, though one transaction garnered a healthy price. RLJ Lodging Trust reentered the Boston market in October with the purchase of the 205-room AC by Marriott Boston Downtown for $89 Million ($434K/key). In other sales, Starwood Capital sold the 510-room dualbranded Aloft and Element at the Seaport to Global Hospitality Investment Group for $142 Million in June. Colony Capital, which hit trouble with its hotel portfolio early on in the pandemic, sold the majority of its hotels assets to Highgate Holdings in March, three of which were in the Boston area. The Residence Inn Foxborough; the Residence Inn Franklin; and a Homewood Suites in Portsmouth, New Hampshire, were part of this portfolio sale. Hersha Hospitality Trust sold its 113-room Holiday Inn Express in Cambridge in March for a competitive price, $32 Million ($283K/key) to private equity firm TPG Real Estate for $32 Million to increase its liquidity.

Despite a very challenging operating environment, Boston's diversified economy in life sciences, financial services, and tech, combined with top universities and hospitals, as well as excellent sports and tourist attractions, positions the lodging market better than others to recover from COVID in the near and long term.


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Information provided by CoStar.com


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